Gold rises to record as dollar buckles and trade war fears flare Yihui XieBloomberg
Mon, 21 April 2025 12:08PM
Bullion roared above $US3384 ($5299) an ounce, as the US currency retreated to the lowest since early 2024. Credit: hamiltonleen/Pixabay (user hamiltonleen)
Gold rallied to a record as trade war concerns, a fresh bout of US dollar weakness, and criticism of the Federal Reserve by President Donald Trump underpinned haven demand.
Bullion roared above $US3384 ($5299) an ounce, as the US currency retreated to the lowest since early 2024.
The International Monetary Fund is set to lower its outlook for growth on Tuesday, while purchasing manager indexes to be released the next day will offer a broad snapshot of activity since the White House’s disruptive tariff push.
Bullion’s latest leg higher followed criticism of the Fed by Trump, who has contemplated firing Chair Jerome Powell, while also making the case for lower interest rates. Fed Bank of Chicago President Austan Goolsbee warned against efforts to curtail the monetary institution’s independence.
Gold has soared to successive records this year as the trade conflict has unsettled markets, hurting appetite for risk assets, while accelerating a rush to havens.
Holdings in bullion-backed exchange-traded funds have risen for the past 12 weeks, the longest run since 2022. Central banks have also been adding the metal to their reserves, underpinning robust worldwide demand.
On the trade front, China warned it was opposed to any party reaching a deal at the expense of Beijing’s interests, according to the Ministry of Commerce. In such a situation, China vowed to take countermeasures, it said.
“If a deteriorating economic outlook in the US prompts Trump to relax or renege on tariffs against the EU or China, equities may rebound and gold’s rally may slow down,” said Yuxuan Liu, an analyst at Guotai Junan Futures.
Leading banks have become progressively more positive about gold’s prospects as this year’s rally has gone from strength to strength.
Among them, Goldman Sachs Group Inc. has forecast that the metal could hit $US4000 ($6263) an ounce midway through next year.
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